Henderson eyes super assets

Henderson Global Investors, the Anglo-Australian fund manager with about $103 billion under management, is set to launch a pure funds management business in Australia.

Rob Adams, former chief executive of Challenger Funds Management, has been appointed to spearhead the push, which is expected to be unveiled today.

The move will pit the fund manager in direct local competition against its largest shareholders,
Perpetual
and
AMP Capital
.

Henderson chief executive
Andrew Formica
, an Australian and former AMP executive, said the fund manager’s ambitions were “big".

“What we can do is build quite a substantial business. To do this well requires a clear commitment to on-the-ground local knowledge and experience," Mr Formica said.

Henderson, which has about 87,000 Australian investors, has a representative office in Sydney that handles about $2 billion for Australian investors in direct property, equity mandates and hedge funds, but wants to expand its business.

Mr Adams, who returned to Sydney from London late last week, will be meeting institutional and retail groups to assess likely product demand, distribution strategies and resources needed to develop a local presence in pure funds management.

The big attraction for overseas fund managers is the $1.3 trillion superannuation assets – the world’s fourth largest pool of managed funds – and its expected growth rate as mandated superannuation contributions rise from 9 per cent to 12 per cent.

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The target is to triple funds under management from 5 per cent to 15 per cent across Asia and Australia over the next five years.

“That’s still the goal," said Mr Formica. “It hasn’t caused our executives to fall off their chairs, but they haven’t achieved it yet either."

Mr Formica, who took over the top job at Henderson in 2008, acquired New Star Asset Management Group at the height of the global financial crisis in 2009 and bought another high-profile traditional London rival, Gartmore, as Europe entered the sovereign debt crisis.

It inherited a large Japanese business from Gartmore and has substantial operations in Hong Kong and Singapore.

A 2½-year-old China business, which will today announce a $500 million direct property investment, is expected to have about $1 billion under management by the end of the year.

Mr Adams, who has been working on a strategy for the local business, said running a “pure" funds management business would avoid the distractions replicating the business model of expected competitors that also offer wealth and trustee services.

“Really concentrating on products and relationships is a big attraction," Mr Adams said.

Mr Formica said “everything is on the table", including mergers and acquisitions with a local operation and setting up a locally based funds management capability.

Over coming weeks there will be discussions with Australian fund managers and retailer suppliers about the types of products and services that Henderson could best provide.

“We want to introduce what is a relevant set," said Mr Adams.

“We’ll put together what is a sensible offer range that would be likely to include global fixed income, global equity and absolute return funds."

Mr Formica added: “Our suite of products is very large. We will initially target a select group, establish relations and then broaden out."

Local distribution strategies are still being finalised but are expected to focus initially on the institutional platforms and retail financial planners.

“Rob is there to look at the market and there are a number of products that would fit with client demand or we can do them organically," Mr Formica said.

“We are expanding our mix through partnering, if that is the appropriate mix. Rob will be there to advise us and recommend the various routes."

AMP acquired Henderson, a traditional City fund manager, in 1998 during its unsuccessful push into the UK market when it bought a financial advisory group and an insurer.